Ross Stores Just Had One of Its Best Quarters Ever

On May 21, 2026, Ross Stores reported first quarter results that exceeded expectations significantly. According to the company's official press release via PR Newswire, total sales hit $6.0 billion, up 21% from $5.0 billion a year ago. Comparable store sales surged 17%. Earnings per share came in at $2.02, a 37% jump from $1.47, and well above the company's own guidance of $1.60 to $1.67. Ross beat its own guidance by over 20%.

The Numbers

Operating margin hit 13.4%, according to PR Newswire — versus the company's plan of 11.8% to 12.1%. Net income was $650 million, up from $479 million the same quarter last year.

The strength extended beyond Q1. Ross's Q4 fiscal 2025 results, reported March 3, 2026 and sourced from the Ross Stores investor relations site, showed total sales of $6.6 billion — up 12% — with comparable store sales up 9%. Full fiscal year 2025 delivered $22.8 billion in total sales and EPS of $6.61.

Who Is Buying at Ross Right Now

According to the Q1 2026 earnings call transcript published by Motley Fool, CEO Jim Conroy stated that new customers were the primary driver of transaction growth. Customer count was up double digits. The gains spanned income levels, ethnicities, and age groups. The 18-24 demographic showed particularly strong growth.

This reflects a retailer pulling in new shoppers rather than simply capturing trade-downs. Conroy told investors that the growth was driven by "compelling merchandise assortments, higher customer acquisition and engagement from our ongoing marketing initiatives, and an improved in-store experience." He also credited tax refunds boosting consumer spending in the quarter.

The Tariff Question

Ross's Q4 report acknowledged "the impact of tariffs and broader consumer uncertainty" as challenges in the first half of fiscal 2025. That language disappeared from the Q1 2026 commentary.

As a discount retailer built around opportunistic buying, Ross benefits when tariffs disrupt supply chains and brands need to move excess inventory. The macro challenges affecting other retailers could be feeding Ross's packaway pipeline. The Motley Fool transcript confirms packaway inventory sits at 36% of total inventory — down from 41% last year — indicating efficient merchandise movement.

Margins Improving

Merchandise margins improved 85 basis points in Q1, per the Motley Fool transcript. Occupancy leverage added another 60 basis points. Distribution and domestic freight costs both declined.

CFO Adam Orvos noted elevated fuel prices will pressure freight in Q2 and for the full year. The company has already incorporated this into guidance.

Guidance Raised

For Q2 2026 (the 13 weeks ending August 1, 2026), Ross is projecting comparable store sales growth of 6% to 7%, total sales growth of 9% to 11%, and EPS between $1.85 and $1.93 — growth of 19% to 24% versus Q2 2025's $1.56.

For the full fiscal year 2026, the company raised guidance to EPS of $7.50 to $7.74, up 13% to 17% from $6.61 last year, according to PR Newswire.

Expanding the Footprint

Ross opened 13 Ross and 4 dd's DISCOUNTS stores in Q1, per Motley Fool, and is targeting approximately 110 new stores for the full year — roughly 5% unit growth. Early productivity numbers on new stores are tracking at or above the 70%-75% of mature store target.

The Northeast, including New York, was called out during the earnings call as a region of expansion. That's a market that has historically been challenging for value retailers.

The Cosmetics Category

From the Motley Fool transcript: cosmetics is a standout category. Conroy described "exploding brands" driving rising sales productivity per square foot, even without a material increase in space allocation. The category shows efficiency potential for future expansion.

What This Means

Ross is expanding store count, improving merchandise selection, and maintaining competitive pricing while most consumers remain budget-conscious in 2026.

For investors, a company growing EPS 37% year-over-year, raising guidance, expanding its footprint, and buying back $1.275 billion in stock this year demonstrates solid execution. The company reported that shoppers — young ones, new ones, ones across every income bracket — are showing up in significant numbers.